tv Power Lunch CNBC December 16, 2013 1:00pm-2:01pm EST
stephanie link one hour debate on tiffany you get the -- won our debate. >> long mastercard. >> pete. >> long boeing. >> mario tomorrow on the half. "power lunch" starts now. >> "halftime" is over, and "power lunch" and the second half of the trading day start right now. >> very interesting week on tap but the bulls clearly not waiting for bernanke and company. the fed decision set for wednesday, but the bulls are taking control. the dow up 133 points, about a full percent p s&p 5001786, two-thirds of a percent higher and there is the nasdaq back above 4,000. but the time table and market statisticians say we're probably a little overdue for a pullback. maybe we had it in the last couple weeks but today we'll take a look at when bull markets take a breather and try to
device some of the signs before your portfolio drops 10%, ahead of the exits. "power lunch's" top five business and finance stories of the year. we'll have one every day this week. today the fifth biggest business story in our judgment of 2013. first, though, let's check in with sue at the nyse. >> that's going to be a fun series, ty. thank you. after today just ten trading sessions left in 2013. tyler gave us the big picture this market up big today, mary thompson here with the specifics, gain of 133 points not bad for the bulls. >> not at all. been up big since the open today. the markets coming off an oversold position in today's session and moving higher. from the get go leading the way strength in energy stocks, oil higher and upgrades over at goldman sachs on exxon mobil as well as fmc it technologies. those are the leaders. the s&p leaders, deals including the acquisition of lsi for $6.6
billion giving a lift to its stock, expedia, positive comments there out of ubs which says that investors underappreciate the growth initiatives management has been taking. stock moving in response to that. monster beverage getting support from rbs which named it one of its top picks. gm, today we had positive economic data on industrial production. general motors says it's going to be investing $1.3 billion in five plants in the u.s. the stock approaching a 52-week high on that news. aig finally selling its aircraft leasing business. both stocks benefitting from that. this market is up but one thing we are watching is the yield on the ten year as that starts to move higher that could take, you know, take -- cause the markets to take a bit of a hit. we're watching that. it's been creeping higher throughout the session but the markets are holding it in. >> so far so good. as we get closer to wednesday i wouldn't be surprise to see the ten-year bump close to 3%.
thanks so much. the nasdaq taking off today as well, big gains for that index. right now we're up 24 points on the nasdaq, two-thirds of a percent. lsi corp up big as avaga will acquire that company. other gainers first solar, ebay and jds uniphase. ty, to you. >> thank you very much. the nasdaq is up big this year. don't need to tell you that. we'll take a look at the index. show da dharmarajan has a look at that. first seema moody on the rebalancing that is taking place. some stocks in, some stocks out. >> yeah. this is an annual thing that takes place, every december the nasdaq does house cleaning rebalancing the 100 index removing some stocks and adding others in. the additions effective december 23rd. dish, ill human minna, trip adviser and tractor supply, trip adviser is thriving on an increase in travel while ross at
isi says ilium na on the fringe of revolutionizing medicine. tractor supply has been a hot name up nearly 70% over the past 12 months. the stocks leading the nasdaq fossil, micro chip tech and nuance communications known for speech recognition software. the worst performing in the group reporting disappointing fourth-quarter results as well. watched by fund managers who track the index and that many times leads to investors rebalancing their portfolios which can help stocks outperform. get this according to shaffer's investment research names removed this time last year are outperforming the names that were added 41% versus 34%. now two of the stocks that were removed in 2012 that outperformed this year, net flicks and green mountain coffee. important not to discount the names removed from these indexes. >> netflix was taken out. >> that stock up 300% year to date. >> oops. >> i guess it had a by the wbad
year before. >> one of the turnaround stories we've been watching. let's drill down more on the nasdaq's amaze run in '13 and look ahead, up 32% so far in contrast the s&p 500 up 24%. the dow up 20%. all pretty good gains. but the bigger win for the nasdaq is over the past five years. it's up 160% in that time so we're asking what's ahead in 2014? sheila, you're up. >> hey, tyler. such an incredible run for the nasdaq over the past five years. just take a listen to these stats. 60% of the nasdaq 100 is up over 100%. seven names including sirius and netflix up over 1,000%. look at the components right now over the past five years there has, in fact, only been one loser, only one stock in the red and that is staples. so really a blockbuster broad-based rally on our hands
and 2014 could be looking gootsd good as well. several strategists point to 2014 and say that tech could be a big outperformer. tech stocks make up about half of the nasdaq 100. certainly a suggestion we could see more and more gains ahead for the index. also, keep in mind, barclays, ubs, goldman sachs, the list goes on and on of the strategist bullish on the sector. a lot of the story has to do with their big cash ball lapses, low evaluations and big dividends the tech companies are starting to pay. one thing to keep in mind the consumer discretionary names part of this nasdaq rally also. keep in mind a company like whole foods has been up over 1,000% over the past five years and that's a sector that some strategists feeling not necessarily so good about as we head into 2014, adam parker at morgan stanley, in fact, is underweight the consumer discretionary sector in 2014. what does it mean? tech could be a good outperformer in 2013, bodes well
for the nasdaq 100. keep in mind not all nasdaq stocks are created equal. scott kessler at capital iq tells me you want to know what you're buying as you head into the new year, particularly if the fed isn't behind your back. ty. >> thank you very much, sheila. with a big run like we've had this year, a correction, of course, is never out of the question. some people have been predicting it and predicting it all year. dominic chu has been researching how to forecast a sudden drop for stocks. how do you do it, dom. >> it's tough. no crystal ball for this. with all of the talk of a reduction in stimulus by the fed how much should investors be worried a potential correction could happen. if you take a look at the s&p 500, since the financial crisis, that's what we've got back here, we know that there was that big drop 57% from the 2007 highs all the way to the march 2009 lows. but the stocks rallied 80% after that. now since then, we've seen other corrections in the market and this is how they've played out. between april and july of 2010, the index fell 16% from that low
through the april of the following year. now then we got a 33% rally. that's a decent size move. the next correction came, a drop of 18% through october of 2011, stocks rallied about 14% from there. then came another couple pullbacks, one between october and november of 2011, it was near 10%, not technically a correction in the strict sense of the word but some traders say it was a pullback. stocks rallied 22%p the other near 10% drop between march and june of 2012. from then through now stocks have rallied 40%. look at all of those four pullbacks since the rally off those 2009 lows, the average pullback has just been around 13, 14%. fairly sizable. the rallies on the backs of those pullbacks have averaged 27%. s&p capital iq notes since 1945, the average duration between 10 plus percent corrections is 18
months. a year and a half. we're currently at 26 months since that last technical correction so a pullback may be due but not one to be feared if these recent historical trades hold true. it's a buying opportunity for many and remember we have a strong, strong rally, sue, off of those 2009 lows. >> terrific job, dom. thanks for setting is up for us. hedge funds are among those betting big on risk right now. trian fund, glenview and coatue with long. perhaps with the big money is this a sign of a market top. kenny polcari joins me on the floor of the nyse and jeff kilburg with kkm financial and joins me from the pits in chicago. kenny, when you do see the aggressive money that long the market, sometimes that makes people nervous, but there hasn't been a real reason to take money off the table yet. >> it may make people nervous
but these guys are paid to mow what they're doing, paid to do the analysis, paid to understand, so it's not necessarily a sign that, you know, with the end of the bull market not by any stretch. they're not paid to go flat at theof every year. they're paid to set themselves up. the fact they're take something money out of the outliers and reallocating it to stock they think will do better next year and increasing their exposure is a bullish sign. >> do you agree with that, jeff? >> i do, sue. hard not to. looks like everyone has rosy check cheeks and the bearded one, not sap ta clause, but the bearded one on wednesday will continue to keep the light green. a tough wrap the last couple years because they underperformed the indices. these are not normal markets. rewind to 2008 during the crisis they got smoked. invested in hedge fund that hedge fund manager has the ability to be nimble and adjust and move with policy. we have had pump fakes from the fed policy but the light is
green like kenny said. we'll see what comes out wednesday in the event something else comes out to help the managers readjust. >> do you hedge your position then, jeff? how are you hedging your long positions in equities? >> well, we invest in proprietary vix strategy. we are long volatility. even with a spike in the vix up to nearly 16 from the 12 level, we are seeing the historical average at 20. substantially below. volatility as suppressed we want to own this. if we get the 5 to 7 % correction our volatility component will rally to offset mitigating the losses. >> the vix is up 29% off lows just what was it a month and a half ago. >> about a month and half, two months ago. >> up 29%. but i do think that jeff has a point. >> but if we see equities off 5s% the vix will go up to 25 or 30. that's another 100%. >> agreed. but i got to tell you i don't know what you think is going to happen on wednesday but i think it's going to be clarification. i don't think you're getting a taper announcement on wednesday.
you're going to get guidance on what's going to happen next year. >> all right. we'll leave it at that. >> i'm lol lonely in that camp. i think there will be a curveball wednesday. >> it's bernanke's last meeting. you think he's going to open the door to taper? >> he has to regain his credibilityp. they've lost their credibility what they did in september. hit the criteria. they got better data. the washington woes out of the way. only situation is inflation. i think there's a curveball coming. >> that's what makes the market, guys. thanks, kenny, jeff, as always. >> up to you. >> as i recall kenny was right the last time he said no taper in september. >> he was. >> let's move on. that would be mr. lebeau there behind the wheel as he always is. gm's current ceo dan akerson and the next to take the wheel mary barra making an announcement at the national press club in d.c. and phil lebeau has been following the news from chicago. >> as we speak, tyler, dan akerson is finally outlining an
investment that general motors announced within the last hour. this is a big one. gm investing $1.3 billion in five plants around the united states. these plants are primarily the engine plants and supplies or components to their engines. they're going to be adding about 300 new jobs at those plants and a lot of people always say you hear about these job announcements, how many jobs have they really brought back since bottoming out during bankruptcy in 2009. back then, u.s. jobs totaled 7,000, that's hourly and salary. added more than 11,000 since then, now almost 88,000 work for gm in the u.s. by the way, their sales this year up 8.8%. just a little above where the industry is for the year, 8.4%. but the market share and a lot of people will be watching this, it is now down to 17.9%. that is a low if they were to end this year, i'm not sure they've ever ended below 18%. quickly take a look at shares of general motors. if it tops 4117, it's a new
all-time high. it's been moving up all through the day as they announce this additional investment in the u.s. and 300 jobs. >> fascinating. they've been doing well and yet their share is declining in the u.s. very interesting. there are new pictures i gather of the mercedes c class. what's you got? how are they different? there they are. >> remember when they used to call this the baby benz. >> yeah. >> not really the baby benz anymore with the cla class out but this is the new c class. they are going to formally unveil it next month and it will go into show rooms at the end of next year. the c class is still the best selling mercedes in the u.s. and critical to their long-term success and when you look at mercedes sales year to date versus bmw and lexus look at the numbers because we may see something we haven't seen since lexus in 2005. a luxury auto brand topping 300,000 in sales. as you know, every year it's a
battle to the end between mercedes and bmw and lexus to see whos comes home with the crown. >> what's the rough price point on that c class? >> they haven't announced it yet. i would say probably 35,000, 36,000. that's going to be the base and then go up real quick from there when you add on the different features. >> all right. phil, thanks very much. down to you, sue. >> okay. ty, you know the weather is bad and the snow is bad when you start hearing canadianss complain. toronto hit with 8 inches of snow yesterday. it fell quickly. over a matter of just a couple hours. traffic was a mess from toronto all the way to montreal. more snow is coming to the northeast. so here's maria la rosa. >> reporter: it is hard to imagine but another round of snow coming to the very snow weary northeast. one day break here. but look at the water vapor imagery. you see where the next one is coming from. this shows the spin in the atmosphere. that area of low pressure, that's the clipper that's going to sweep on down and really
likely going to create a mess for the morning drive. by tomorrow morning, philadelphia, new york, pittsburgh, going to see some snow on the ground and then by the evening rush, it's boston's turn. keep in mind, we get another burst here by the evening hours for philadelphia, new york, allentown as the way finally gets a push out of here. as far as totals those areas in purple 5 to 8 plus inches of snowfall. for a place like philadelphia, on the 1 to 3 side, new york, into boston a good 3 to 5 inches all falling within about a 12-hour period. again timing is everything. a lot of messy morning drives and likely evening rushes for much of the northeast. back to you. >> all right. get your scrapers ready. it wasn't a storm that caused these big problems at the airport in san jose this morning. see what happened after the break. we'll tell you about that and you didn't know it, the fed turns 100 this year. happy birthday to you, fed. there's a big celebration with all three living fed chiefs. next up, volcker versus greenspan versus bernanke versus
batman versus superman, troubles, triumph, glory and fed fame after the break. there's a saying around here, you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event.
volume is already happened through this 1:00 hour so sue, big gains for big blue. back to you. >> thank you very much, dom. happy birthday, fed. the federal reserve marksing 100 years with speeches from all three living fed chairman, paul volcker, alan greenspan and ben bernanke. you heard of mount rushmore. today fed rushmore. the top fed analyzers in the world join us. larry kudlow at post nine on the floor of the new york stock exchange. elan of "the washington post," greg and, of course, steve liesman. you all look fantastic immortalized in stone. let's start first of all with there are two questions we want to address, one of which is, which of the chairman faced the biggest challenges during their tenure at the federal reserve and how is history going to treat them and record their events and their actions? larry, you want to give it to
paul volcker, but in all fairness you worked with paul volcker so maybe you have an inside track on that. >> perhaps i do and i just saw him. look, i've been watching the fed or working at the fed since the middle 1970s. paul volcker is the greatest chairman in the history of the federal reserve board. he faced 15 to 20% inflation okay which was destroying our economy and the rest of the world's economy. i believe that was the greatest crisis of all. he conquered it. he conquered it and did it the old-fashioned way. he removed money supply, raised interest rates and was successful and frankly that set the tone to 25 years of prose peerty. >> elan, weigh in on that. do you agree or give the nod to mr. greenspan or bernanke. >> one thing that is forgotten about paul volcker how much political and public opposition he faced to his policies at the time. you got to remember, there were farmers actually blocking the front entrance of the federal reserve at the time with their
tractors to protest the interest rate increases. so the level of public outcry at the time that he was pursuing his policies is something that certainly is a challenge and something he had to remain resolute in the face of. >> i want to cut in, i don't believe i've met you, but that is a great point. you had construction guys with two buy fours storming the front doors. >> i remember covering it. >> and volcker was immune to it. i will put in one plug for another ex-boss of mine, ronald reagan did give volcker the ground to stand on but volcker was courageous. >> greg go next and steve weigh in. volcker, greenspan or bernanke some. >> i think that each are going to be remembered for different things but volcker and bernanke in particular will be remembered as having managed some severe crises. remember volcker for slaying inflation but that was a it ten-year period of almost unending cry ses. the near bankruptcy of new york
city, second oil shock, credit controls, inflation, mexico going bankrupt for the first time or almost going bankrupt, the ldc debt crisis, it was like one crisis after another. he's improvising, bailing out, doing all those things. >> you would give it -- >> something similar. but from a different severity. greenspan more of a caretaker position between these two chairmen. >> steve, because of the global nature of the '07 crisis, i probably would give the nod to bernanke with due respect to mr. volcker. weigh in on this, who would you give the nod to? >> first of all i can't get over the idea that i was in teddy roosevelt's spot. i'm really charged by that. i think, you know, weight wise we almost have the right position right there. >> that's too funny. >> there i am in the teddy spot. i can't stop thinking. i don't think the histories has been written yet. if you think about the arc of public opinion on quantitative easing, there were vociferous
opposition to qe1. that now is now broadly seen as having been essential and saving the u.s. economy. we'll see what happens with two and three over time. but the history of what bernanke has done is not written because they're not out of it yet. it may be we fondly remember bernanke and forget the two-by-fours and construction the same day we have volcker in the sense there's a certain delusion of nostalgia. we forget it was actually larry's job to keep the construction workers away from volcker. >> can i say -- >> i will say this, though, what steve just said about bernanke i think is very fair. there's no question. >> right. >> bernanke backstopped the system with liquidity in late 2008 and 2009. however, on the negative side, he was way too tight in 2008. and helped turn a mild recession into a very, very deep near depression.
>> okay. >> regarding qe2 and 3, history will tell. i put a plug in for greenspan, real fast. greenspan, kept the inflation rate down. >> yes, he did. >> greenspan understood the technology boom of the '90s. however, i think alan's last term was marred, he kept interest rates too low too long and contributed to the bubble. >> to the bubble yeah. >> i want to make one broader point here. actually i've been going through fed history recently and what's striking as time goes on, you remember the events less through the lens of who was in charge at the time and more through social events. hardly anybody remembers who ran the fed in the period running up to and after the great depression. we remember the periods marked by froth on wall street and then just enormous political changes that resulted from the economic trauma we went through. 15 or 20 years from now we'll look at it as a period that marked the swing to a much more interventionist role by the
government and other levels. >> we have to go. i'm sorry. >> i knew benjamin strong. that's all i'll say. i was there in the late '20s and early '30s and he made terrible mistakes. >> thank you very much. appreciate it very much. ty? >> thanks, folks. is making billions of dollars in the search engine business just too boring for google? josh lipton is live in san jose. >> yeah. tyler, the robots are coming. google just bought boston dynamics. the company that builds robots for the military. why would google buy this company? more on that in two minutes. my mantra? family first.
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[ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. welcome back to "power lunch." kate kelly in manhattan at the federal courthouse behind me. we are more than half way through closing arguments in the important u.s. versus steinberg insider trading case. we heard from the government up until shortly after noon. they're essentially arguing sac, specifically michael stein burg, a trader there using coding language to direct an underling to trade on inside information. his lawyer saying that the star witness for the government has a house built on lie and that essentially he said jon horvath is a walking, talking, reasonable doubt, tyler. tough language thrown around in the courtroom. we're on a short lunch break now and hear more from in a few minutes. >> thank you very much, kate kelly, reporting from manhattan. snow in the east, a water main break out west, it spilled water throughout the terminal at
san jose international airport this morning. the water was coming from the ceiling, the floor, sounds like my house a few weeks ago. the airport was trying to compensate condensing all traffic into another terminal. at least that's how they tried to respond to it. always seems to be something when you fly in the winter whether out in the nice climate of california or not. the google guys sticking with folks out west, branching out again, this time into military robots. josh lipton, what are they going to do with a military robot manufacturing company? seems like a departure. >> it does. google's larry page, he has talked about the importance of what he calls moon shots, the big, bold ideas that can seem like sci-fi thrillers. robots to scale hillsides and run like cheetahs. they bought boston dynamics that designed robots that became internet sensations. big dog, a loud four legged
terror that can march up hillsides. a video of hillside has been watched 15 million times. wild cat, a noisy robot, seen galloping, and turning through parking lots. and then cheetah, which is shown running on a treadmill at 29 miles per hour, faster than usain bolt. "the new york times" first reporting the acquisition the eighth robotics company google has bought in the last six months. the efforts are being led by andy ruben who leds the development of androidp. now google would not tell cnbc about the price of the acquisition or purpose but there have been reports the company's robotics efforts could be aimed at manufacturing like electronics assembly. its rivals see the potential benefits of such technology and amazon's rollout of robots at its warehouses from a company it bought last year called keva systems could save it $900
million a year. sue, back to you. >> it's kind of creepy looking. that's all i can say, josh. i'm sure it's great but creeps me out. whatever. thank you so much. all right. let's get back to the markets. big day on the nasdaq for stocks there. and sheila is back with us in times square. hey, sheila. >> hey, sue. a solid day at nasdaq. we are up about 0.6%. we are seeing a broad-based rally here. a winning kind of day. talk about the biggest winner and that is evaj yo shooting up after buying lsi for about $6.6 billion. expedia, an interesting one. it has been a laggard when looking at the on-line travel space. but today getting a nice boost after ubs upped its price target on the stock. similar story with monster beverages, rbc calling it one of the best picks of the year when it comes to natural soft drinks and finally let's talk about the internet and social media space. the twitter downgrade having kind of a halo effect on a lot of those names. now you're seeing names like yelp, linkedin, facebook taking
a breather. couple nice weeks for the stocks. perhaps a little breather that twitter halo effect happening when it comes to social media and names. back to you. >> thank you very much. to interest rate just ahead of that two-day fed meeting. rick santelli is tracking the ten-year for us. hey there. >> hey, sue. what a strange day. look at intraday chart of tens, you would have thought all that good data was for not because yields mostly moved lower and then they popped out. what happened when they popped? we had curve steepening. haven't seen that in a while. let's look at the difference between 30 and 5 year yields. the steepening on this chart. year to date, up until the last month it's been mostly about steepening but flattening has ensued. look how much we've had. what does that mean? most likely year-end profit taking. look at the dollar index, a lot of bets on this floor as to where it's going to close. what's the top pick? unchanged on year which would be
about a half cent lower than we're trading. tyler, back to you. >> rick, thank you very much. we're going to get back to the markets after the break. it is an up day for equities. the dow let's take a look if we might. the dow up triple digits earlier. there you go. up 132.88 at 15888. plus we're going to talk to jane wells in the house, tractors, crops, big business and maybe bad news. >> i'll tell you, the bad news, it's freakin' cold here in new york. it's going to be 80 degrees back home in l.a. in farming always something bad. currently the bad news we've grown too much food. less money for tractors. how john deere will manage when we come back. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here
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all the indices in the green. mary thompson at post nine. >> they've been in the green since the open as positive data today has been underpinning today's rally. good data from europe, germany on the pmi there. of course the industrial production numbers here in the u.s. let's take a look at dow movers. we've been talking about exxon mobil and energy leading the rally today. but also we're seeing strength in ibm and caterpillar, two of
the worst performing stocks in the dow industrials for 2013. today they're getting a bid not on any specific news but maybe someone is getting ahead of the dow theory with the two stocks. dividends increases one from archer daniels midland, buying back about 18 million shares. pfizer upping its dividend by 8%. we want to point out zion bank corp because there was speculation about what banks would be impacted by volcker. this company is taking a charge to write down the value of some of the cbos it has because it can't hold them because they're considered cover funds under volcker and taking a $387 million charge because of that. lastly let's check on the retailers because in the wake of the storm that hit a good part of the midwest and the northeast this weekend, there's some concerns that might impact retail sales, but again, this coming weekend is supposed to be one of the busiest for christmas sales. an expectation we could see those sales made up over the weekend as we talked about it, we might be two of those people.
>> i'll be there. we'll have coffee. >> yes. >> thanks, mary. >> sure. >> ty, up to you. >> sue, jane, nothing beats a good tractor story on a cold day. sales up 2% in the year so far. how about that. >> you don't say? >> i've been thinking about that all morning. the big name in the business, john deere runs like a deer has had an up and down. the peaks and valleys there. like a deer jumping over a fence and coming down. farmer jane here today. take it away. >> tyler, thank you very much. the profit part on the farm is getting plowed under by a bumper crop. the association of equipment manufacturer said 184,000 tractors have been sold in the u.s. up 10% but the inventory is building. deer said it expects u.s. and canadian equipment sales to fall 5 to 20% in 2014. take a look at what's happened with life bloods american corn. sky high land price in the midwest are starting to fall. the party's over.
sort of. deer rival adco holding investor day tomorrow. adco doesn't sell as much big equipment as deer does in the u.s. morgan stanley predicting flattish guidance. bar overall wells fargo expects an extended period of low farmer buying powers. farmers come to the realization that crop prices will not return to the super cycle high levels. you don't say. it has an underperform on both deer and adco. says farmers have bought their big equipment for now. quote, we see little pent up demand. could be a good year for smaller equipment. and, in fact, the biggest jump in sales last month was for tractors under 40 horsepower. by the way, barclay's points out more than half of deer sales is smaller in equipment. credit suisse met with deer management and confident deer can stay ahead of the turn, positive tail winds in small equipment and a bounce back in
construction. >> under 40 horsepower. that's not a deer, that's a fawn. that's a tiny tractor. >> not a five-point buck. i don't know. >> thanks very much. no good deed goes unpunished. why so many are so upset with santa claus in canada. that's just ahead. plus -- >> all week on "power lunch," the top five stories of the year. we're kicking it off in two minutes with number five. it's a big win for a big boxer. back from the brink. more "power lunch" in two minutes. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.
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we know what it means to serve. hi, everybody. i'm brian sullivan. on "street signs" on this monday a very important week here for the markets. join us for your fed playbook. a bull/bear debate on facebook's prospects for 2014. can it continue its amazing run? the let america export oil movement is growing. will it happen and who will win or lose if it does? big debate and we have it coming
up on "street signs." back to you. >> thank you very much as we head into the final days of 2013, we're going to countdown "power lunch's" top five business and finance stories of 2013. we'll do one a day between now and the end of the week. we're going to start with a big comeback for a big box retailer. our story number five. >> "power lunch." top five stories of 2013. number five. the best buy turnaround. >> upgrading, upgrading best buy to buy from hold with a $23 price target. saying this is first and foremost a management upgrade. upgrading, upgrading, upgrade call. >> best buy moving higher after jeffreys upgraded them to buy from hold. retailer saying it will offer a 30% discount on its current stock of apple ipad tablets in the united states. >> best buy shares have surged a lot this year. 130%.
best buy which was given up for dead last year and is now at a two-year high in the stock market look at that. continuing its turnaround. >> the stock up 230% for the year. quite a comeback story, ty. >> really truly is. well stacy, stacy is a retail analyst and live with us at -- in london and sue is down at the new york stock exchange. stacy, i can't think of a more market turnaround for a retailer. what have they done right and what have they got left to do? >> yeah. tyler, this has been the dark horse of 2013. and basically, you know, best buy as you said was left for dead a year ago and they brought in a new management team and they've basically price matched, they've gone after the on-line conversion rates which were running behind, they're looking at the store optimization looking at which products should be in the store, which should be leaving the front door and, you know, this has been really
a management it turnaround story. we thought it was really an industry story, but there were problems internally that have been fixed. >> what else do they have to do to continue the momentum? i mean i don't know many people who expect the kind of percentage gain in the stock that we've seen this year to carry into next year, but is what's been put in place enough or do they have to do more? >> well, sue, that's the question now. so, you know, it's interesting, the stock is up 250% and this is not a margin expansion story. this hasn't really been a revenue story. comps are basically flat this year. flex year we need to see, are they able to compete against amazon with price matching. i think number two, we're looking for them to get rid of the chinese business. last year they got rid of the european business. they really need to focus on the north american business. but the question is, now that we have the expectations game over in 2013, into 2014, can they get
that revenue line and those margins really stabilized? that will be the next leg of the stock. >> have they solved their real estate issues? they've got a lot of big footprint stores in an era when maybe bigger is not necessarily better. and my second question quickly is what can other struggling retailers like sears, like jc penny and maybe some of the teen retailers learn from their experience? >> well, i think, you know, what best buy has shown us is that in a lot of these cases, there are management issues in addition to industry issue. there are some of the problems can be be solved even though you're in a challenged business and you were talking about the snowstorm before, the companies that are winning on-line and best buy has really gone after that, upgrading the experience and traffic and conversion rates have followed, i think the retailers that are lagging behind on-line really need to get moving because if that's where things are going and, you know, look at a weekend like this weekend when the weather
was terrible, those are the retailers who are going to win that are getting on-line right. >> all right. stacy, thanks very much. and tomorrow, we're going to unveil our fourth biggest business and finance story of the year without giving too much away, think canada. sue? >> and keep thinking about canada right now. see why santa claus is in so much trouble in the great white north. plus, is haggling coming to america? it's not just for car dealerships anymore. more "power lunch" in two minutes time. we're up 126 points on the dow. (vo) you are a business pro.
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welcome back. take a look at the u.s. markets. the industrials up 133, almost 4 points, s&p up 11 and nasdaq up 27. the department of transportation saying today that u.s. passenger airlines reported a net profit of $3.2 billion in the third quarter this year, more than double what they earned in the same time period in 2012 that includes fees for luggage and reservation changes, not food, drinks, pillows and television service. the airline index picked up 12s% during 2013. time for the power rundown. jane is back, phil is back. there is backlash on west jets's
holiday promotional video. the canadian airline giving away christmas presents to two flights full of passengers. the video has received more than 27 million views on youtube. where is the outrage coming from? why are people annoyed by this some. >> >> not a ton of people but we wrote it for cnbc.com and a few analysts saying look, there's nothing wrong with doing this video, but in a season of giving, should you be giving passengers presents? wouldn't it be better to ask people what would you give to somebody who is needy or what would you conate to a charity. but i have to say, tyler, if you look at it this video, watch it all the way through, more than five minutes, but it's one of the best corporate videos that i've seen put together in a long time. >> what they were doing is what, asking people what they would like for christmas when they boarded -- >> at departure. >> it's there waiting for you. >> yeah. >> when you checked in, santa came on the screen and said what
would you like for christmas, people thought this is a neat gimmick. one guy said i want socks and underwear. when they arrived in calgary about 4 hours later instead of their luggage, presents they asked for. >> should have asked for the big screen. >> somebody did. >> they did. and got it. brought a tear to my eye. if you're criticizing this get a life. santa was wearing blue. >> where's the blue santa? >> that's the company colors. >> oh, that's the company colors. >> i don't know. >> okay. >> that was the weird part. take company colors so far. they want to do that that's the way they want to spend their money and build customer loyalty smart business. >> story in "the new york times" more retailers see haggling as a price of doing business. more and more consumers are going into stores and bargaining for better prices and more and more retailers are willing to negotiate. would you? it's a big thing in europe and many parts of the country. the price you see isn't the price you settle on. >> i feel like an idiot because
i have been paying full retail. i know that the rest. world haggling is standard operating procedure. i'm not good at it. >> my husband who is a scottish descent loves it. everything is negotiable. >> haglers. i can't do it. my sister-in-law is brilliant at it, she can do it, get the price down. what about you? >> no, i don't do it. frankly i don't do it because i think it's a pain in the neck. seriously, could you get a lower price? absolutely. certain areas it does matter and you should do it, but every time you go to the store, please. i'm too exhausted. >> americans, go go go, what's the price, get out of here. >> i like it, don't like it. >> talk about the story we ran video, google acquiring boston dynamics, a robotics company. eighth robotics company google has bought in the past six months. what's google up to here, phil? >> i showed this video to my son and first thing he said was,
that is so cool. >> it's very cool. >> i can't wait to see these. >> "empire strikes back." this is just the beginning. we see a stace when goy into factories. jane has seen a taste of it as well. nothing compared to the videos what this research has been producing. >> here's my thing, google spending money on stuff that i don't know will make money for google. >> i think it will. >> i don't know. i think there's promise in this technology. >> look at that long horn. that's funny. >> that is funny. >> that's very funny. >> i think it pays off some day. i do, tyler. we won't see it right away but will pay off some day. >> like two people in there. >> like a horse. oh, my goodness. >> he kicked it. >> that's really cruel. >> robot abuse. >> i don't know we solved that
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a strong broad based market rally. the dow jones industrial average up about 145 points. that's almost a full percentage point gain. the s&p up about 13 points and nasdaq up about 30 points on the trading session and that is despite the fact that the ten-year note is holding steady at 2.88%. some people feel as though it may creep a little higher. remember, we start the two-day fed meeting tomorrow. speaking of which, the fed's decision 2013, a cnbc special report will be wednesday at 2:00 p.m. that, of course, will get the decision on whether or not they make any moves on rates or taper or anything along those lines followed by mr. bernanke's news conference which is at 2:30 p.m. eastern time. it's going to be very, very highly watched. >> and, of course, this is his last news conference before he presumably moves on to whatever he is going to do next.
i thought it was an it interesting conversation you had about a half hour ago about bernanke and greenspan and volcker. >> you know, i give it to bernanke only because the 2007 crisis was so global in nature. >> all right. >> and the moves he made were impressive. >> "street signs" begins now. ♪ it's the most wonderful time of the year ♪ >> it is the most wonderful time of the year but most important week of the year pore the stock market. all eyes on the fed. hi, everybody. good start to the week for stocks. we'll hit them. your other top stories this hour. could america actually become an oil exporter and who wins if we do. why google is buying up so many robot companies and for the files of no good deed goes unpunished, a story abo